POLICE in Northern Ireland have launched an investigation into allegations of a political pay-off related to the €1.6bn sale of Nama's loan book in the North.

Governments on both sides of the border have been under intense pressure after Independent TD Mick Wallace made explosive claims that a secret Isle of Man account containing £7m was earmarked for politicians.

Nama officials are due to appear before the Dáil's Public Account Committee (PAC) today where they will answer questions about the controversial sale of the biggest single portfolio since the bad bank was established.

Stormont's finance committee is also investigating Mr Wallace's claims about the sale of the loan book to US firm Cerberus Capital last year.

And last night, the PSNI said a criminal inquiry will be launched in relation to concerns raised over the sale of Nama's Northern Ireland property portfolio and the recent claims made by Mr Wallace.

Assistant Chief Constable Will Kerr, who is head of crime operations at the PSNI, said: "We believe that there is sufficient concern in relation to potential criminal activity, surrounding this property deal, to instigate an investigation.

"PSNI are now engaging with a number of other national and international law enforcement partners to consider how best to take forward this investigation."

Mr Wallace claimed the offshore account was discovered during a routine internal audit of Belfast law firm Tughans following their work for Cerberus.

Senior partners at Tughans said the money was diverted without their knowledge and has since been retrieved.

Ian Coulter, a former managing partner at Tughans, who the firm said worked on the Cerberus/Nama transaction, has since left the company.

Mr Coulter has not commented publicly on Mr Wallace's claims. Mr Wallace has refused to appear before the PAC to discuss his claims.

The committee decided yesterday not to compel the Wexford TD to attend.

Speaking after the meeting, Fine Gael Waterford TD John Deasy said: "The distinct feeling from the meeting was before we take it further we need to hear from Nama and the Comptroller and Auditor General to see if Nama has a case to answer."